Chinese investors rising up the global property ladder

15 February 2017

In a sign of the growing confidence of Chinese investors, figures have emerged showing a 53 per cent increase in commercial and residential property investment by Chinese buyers in 2016 compared with the previous year.

With a total spend of US$33 billion in the year, the outflow included more than US$14 billion invested in the United States in deals such as Anbang Insurance Group’s US$6.5 billion acquisition of Strategic Hotels and Resorts and HNA’s US$6.49 billion for 25 per cent of Hilton. In August 2016, Chinese group Minmetals bought a major residential development plot in Hong Kong for HK$4 billion (US$520 million).

Chinese investment in UK property ranks close to that in the United States, Hong Kong, Australia and Malaysia in its popularity, as the country’s investment community seeks safe haven locations.

‘We believe that Chinese investors will continue to be major movers of capital into global real estate for many years to come,’ said one Singapore-based property expert.

The anticipated continued investment volume comes despite tightening capital controls in China, with regulators understood to be applying rules concerning foreign real estate deals more strictly in 2017. For example, regulators are required to approve all foreign property acquisitions over US$10 billion, although there are relatively few such deals.

Such issues have not deterred the larger Chinese-based investment groups. Indeed the fall in sterling has added momentum to the market: there is renewed interest from investors who have sat on the sidelines for years, according to one London-based property expert. ‘Even though there is a small discount on the yield, there is now a big discount on currency.’